New-age tech companies to comprise 8-10% of India's listed m-cap in 10 years: Investor Kunal Bahl

Titan Capital and AceVector co-founder Kunal Bahl on Friday predicted an "altitude shift" for India's startup ecosystem, stating that new-age technology companies will likely account for 8-10 per cent of the country's total listed market capitalisation in the next decade.

Bahl noted that while tech companies represent only about 2.5 per cent of India's market cap, the trajectory is set for a massive expansion as the economy formalises and digitises.

"If you look at the US, about 25 per cent of their listed market cap is new-age tech companies. In India, that is only 2.5 per cent. Out of our USD 5 trillion economy, only USD 150 billion is the market cap of listed new-age tech companies.


"If you just zoom out and do an altitude shift, you will see that over the next 10 years, there are just going to be companies after companies that will get listed in India from the new-age economy. The potential, the headroom for growth for Indian tech companies, is immense. We're just getting started," Bahl said here at the ET Now Global Business Summit.

He added that as India's total market cap grows to USD 15 trillion over the next 10 years, the share of new age tech companies is "fathomable" to reach 8-10 per cent, potentially creating a value of over USD 1 trillion.

Bahl emphasised that India is at an inflection point driven by three major tailwinds: the formalisation of consumption through UPI and demonetisation, the financialisation of small businesses, and the rapid digitisation of infrastructure. These factors, he said, are leading to rapid adoption of tech businesses and their products in India.

"It is no surprise that we are now seeing Indian new-age companies... being celebrated and becoming part of the Nifty 50. It is only a matter of time before there are more," he said.

Bahl argued that India's strength lies in the application layer and building solutions for "boring industries" rather than just consumer-facing apps. He cited an example of an Indian startup using AI to interpret and track complex tenders that run into thousands of pages.

"Context is important, and that's where companies from India will emerge who have contextual AI apps built for the world," Bahl said, adding that he expects Indian AI application companies to generate billions of dollars in revenue in the coming years.

Despite the optimism, Bahl pointed to a significant "dearth of capital" and "frugal mindset" of Indian business committees and underlined the stark disparity in venture funding between India (USD 10 billion) and the US (USD 300 billion).

Praising the government's initiative to launch a Rs 1 lakh crore research, development, and innovation (RDI) fund, Bahl stressed that India needs much more investment and a shift in mindset regarding risk.

"We need to be okay with the concept that there will be some wastage along the way of building world-beating tech companies out of India... and we need to make peace with it."

Bahl noted that the most valuable businesses over the next 15 years will likely emerge at the "intersection of consumption and AI".